Clawbacks in Poland and Romania Could Shave One Third Off EDPR's 2023 Net Income

We maintain our EUR 22 fair value estimate for no-moat EDPR and EUR 6 for its parent company, no-moat EDP, after the former said that the clawback mechanisms recently introduced in Romania and Poland could shave about one third of its 2023 net income. The slight rise of EDPR shares at time of writing shows that the impact was already priced in. Shares are in 3-star territory. On the other hand, buying undervalued EDP shares gives exposure to EDPR at a discount.